O Canada! That’s the refrain from the online advertising industry, following the release of a report showing that its Canadian revenues rose 16 percent last year compared to 2010.

The annual report, "The Canadian Online Advertising Revenue Survey", was conducted by Ernst & Young for the Interactive Advertising Bureau of Canada (IAB Canada). One of its most notable findings was that French language online ad revenues rose 14 percent and constituted 19 percent of total Canadian online revenues in 2011.

Cdn Online Advertising to Grow 10% This Year

Forecasts indicate that the industry should grow by another 10 percent this year, to a total of CDN$ 2.844 billion, including French language ads.

The report noted that even as the pie is growing larger, consolidation among online publishers in Canada has resulted in the top 10 earners taking 84 percent of all online ad revenues, an increase of 3 percent from 2010. The top 20 earners accounted for 90 percent, also a 3 percent increase.

Search and display ads both grew, with search up 19 percent to nearly CDN$ 1.1 billion and display up 22 percent to CDN$ 840 million. Classified/Directories dropped slightly, down 2 percent from 2010. Online video continues its boom -- online video ads grew a whopping 96 percent from the previous year.

Automotive continues as the largest category by revenue, accounting for 15 percent of the total -- an increase of 3 percent. Packaged goods (12 percent) and financial services (10 percent) took the second and third spots.

Mining Data for Opportunities

By comparison, TV ads in Canada increased by only 5 percent and radio by 4 percent, while newspapers dropped 6 percent. Overall, online ads in Canada now represent a 21.7 percent share of the entire advertising market by revenue.

Challenges facing the industry include competition from social networks, ad agency emphasis on performance-based pricing and downward pressure on display CPMs. The continued growth of automated buying demand-side platforms has had a significant impact on display CPMs.

The report highlighted the need for “a more compelling rationale” for premium inventory management strategies by online publishers and for “more intelligently” mined audience and usage data that will identify content opportunities (check out :Are Your Digital Analytics Action-packed or Action-less?). The report also highlighted a need for multi-platform media owners to work with production teams who can support a high level of integrated ads while controlling costs.